House prices continue to rise in September

House prices have risen by just under 1% in September pushing prices to another all-time high, according to the latest data from mortgage lender Nationwide.

The rise of 0.9% in the latest monthly index takes the average price of a house to just over £226,000, 5% up on the figure from a year – the biggest year-on-year increase registered since 2016.

However, the 0.9% increase compares to a rise of 2% in the previous month, which appears to support data this week suggesting that the intensity of the post lockdown surge in demand is beginning to wane.

Robert Gardner, chief economist at Nationwide, said the continuing price rises reflected both pent up demand from the period the market was effectively shut, as well as people looking to move to more rural locations as a result of life in lockdown.

However, he said that research by the Nationwide indicated that a fifth of those planning to move house had put plans on hold due to the economic uncertainty created by the pandemic, with the young most affected, and that economic conditions were likely to worsen.

He said: “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down.

”While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces.”

Nationwide’s figures suggested that price rise have been strongest in the South west, outer London and the South east.

On Monday Zoopla said it had seen demand from first time buyers falling back in the wake of growing economic uncertainty to around the level seen in advance of the pandemic.

Jonathan Hopper, chief executive of Garrington Property Finders, said the figures showed the market had engaged in a “breathless dash” since emerging from lockdown, but had now reached a “decisive time”, with buyers who made their buying decision before lockdown having completed their purchases and making way for those who have bought since. “While buying a home is a purchase unlike any other, and buyers’ motivations are multi-layered, the booming market cannot defy economic reality for long,” he said.

Ross Counsell, chartered surveyor and director at Good Move, said the medium-term outlook for the UK housing market remained uncertain. “With rising unemployment figures and the end of the furlough scheme on the horizon, the future of the property market will depend solely on how the wider economy performs,” he said.